When researching solar in India, you will encounter three types of systems: on-grid, off-grid, and hybrid. Each serves a different need and comes with very different costs and capabilities. Choosing the wrong type for your situation is an expensive mistake. This guide explains what each system is, who it suits, and how to decide.

On-grid solar (grid-tied solar)

An on-grid or grid-tied solar system connects directly to your DISCOM’s electricity grid. Your panels generate power, and any surplus goes to the grid through net metering. At night or during low generation, you draw from the grid as normal.

Key feature: No batteries. The grid acts as your storage you export during the day and draw back at night, with net metering accounting for the difference.

Advantage: Lowest cost. On-grid systems are 20 to 40 percent cheaper than hybrid systems of the same solar capacity because there are no batteries.

Disadvantage: No power during grid outages. An on-grid inverter automatically disconnects from the grid during a power cut (an anti-islanding safety requirement) and your panels stop generating even in bright sunshine.

Who it suits: Households in urban and semi-urban India with reasonably reliable grid power. If outages are infrequent and brief, on-grid is the financially optimal choice. Most urban installations in Delhi, Mumbai, Bengaluru, Pune, and similar cities are on-grid.

Cost for 3 kW: Rs 1.5 lakh to Rs 2 lakh fully installed before subsidy.

Off-grid solar

An off-grid solar system is completely independent of the grid. It uses batteries to store solar power for use at night or during low generation. There is no grid connection for import or export.

Key feature: Total independence from the grid. Works in locations with no grid connection or unreliable power.

Advantage: Power 24 hours a day from solar and batteries regardless of grid availability.

Disadvantage: Significantly more expensive due to battery cost. No subsidy under PM Surya Ghar, which applies only to grid-connected systems. Batteries need replacement every 7 to 10 years.

Who it suits: Rural properties with no grid connection, or locations with extreme power unreliability (8 or more hours of daily outages). Not appropriate for urban households with a grid connection, as the economics are heavily unfavourable compared to on-grid plus net metering.

Cost for 3 kW with adequate battery backup: Rs 3.5 lakh to Rs 5.5 lakh before considering battery replacement costs.

Hybrid solar

A hybrid solar system connects to the grid and also has battery storage. The system uses solar to charge batteries and power the home, exports surplus to the grid through net metering, and can draw from both batteries and the grid when needed. During grid outages, the battery provides backup power.

Key feature: Best of both worlds grid benefits through net metering, plus power backup during outages.

Advantage: Backup power during outages. Net metering credits on exports. Ability to add more batteries later as costs fall.

Disadvantage: Higher upfront cost than on-grid due to hybrid inverter and batteries. Battery replacement cost every 7 to 10 years.

Who it suits: Households with regular power outages (2 to 5 hours daily), those in areas with uncertain grid reliability, and buyers who want both solar savings and power backup. Also relevant for households near sensitive equipment (home offices, medical devices) where power continuity matters.

Cost for 3 kW hybrid with moderate battery backup: Rs 2.5 lakh to Rs 3.8 lakh before subsidy.

Note: The PM Surya Ghar central subsidy applies to hybrid systems (the solar component is grid-connected), though the battery component is not separately subsidised.

How to decide

Choose on-grid if your grid power is reliable (outages under 1 hour per day on average), you want the fastest payback period, and your priority is maximising bill savings.

Choose hybrid if you experience regular outages of 2 hours or more per day, you have sensitive equipment needing power continuity, or you want backup power as a priority alongside solar savings.

Choose off-grid only if you have no grid connection or your grid reliability is so poor (8 or more hours of outages daily) that the economics of on-grid or hybrid do not make sense.

Battery technology options for hybrid and off-grid systems

Lead-acid batteries are cheaper upfront but have shorter life (5 to 7 years), lower depth of discharge (50 percent usable capacity), and more maintenance. Increasingly uncommon in new residential installations.

Lithium iron phosphate (LFP) batteries are the current standard for residential solar backup. Higher upfront cost than lead-acid, but longer life (8 to 12 years), deeper discharge (80 to 90 percent usable capacity), and no maintenance.

Lithium NMC batteries offer higher energy density than LFP but slightly lower cycle life. Used in some home battery products.

Summing up

For the vast majority of urban Indian homeowners with reasonably reliable grid power, on-grid is the right choice. It delivers the best financial return and qualifies for the full PM Surya Ghar subsidy. Hybrid is the right upgrade for those with genuine backup power needs. Off-grid is a specialised solution for off-grid locations.